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Consumer Segmentation -
Purchasing process




michal.hysky@nokia.com

1   © 2005 Nokia
Consumer Segmentation

Consumer Segmentation Model Map
                                                High Involvement                                   Technology
                                                                      Young                        Leaders
                                                                      Explorers


                                                                                                                Style
                                    Pragmatic                                                                   Leaders
                                    Leaders                        Career Builders


                                                                                  Young Settlers




                                                                                                                    Aspirational
Rational




                                                                                                          Style
                                                                                                          Seekers

                                              Practical
                                              Homeowners
                                                                                              Style
                                                                                              Followers
                                                                     Family
                        Comfortable Seniors                          Providers




                                                Low Involvement


 2     © 2005 Nokia
Consumer Segmentation

Consumer Segmentation Model Map
                                              High Involvement



                                                                                               Style
                                                                                               Leaders
                                                                 Career Builders




                                                                                                  Aspirational
Rational




                                                                                   Style
                                                                                   Followers
                                                                   Family
                        Comfortable Seniors                        Providers




                                              Low Involvement


 3     © 2005 Nokia
Consumer Segmentation | Style leaders


Style leaders                                                                           HIGH INVOLVEMENT




Life, Work, Values and Activities




                                                                                                           ASPIRATIONAL
                                                                             RATIONAL
    • Over represented in young and young married couples with                          LOW INVOLVEMENT

      kids
    • Tend to be well-educated and well-off
    • Optimistic and highly motivated. Willing to try new
      experiences
    • Hard-working perfectionists. Like to take initiatives
    • Willing to take risks to get what they want
    • Environment values in general are important to them
    • Spend a lot of time outside, like socializing and            ‘Set mobile trends’
      eating out
    • Cinema, music, photography, and competitive             “My cell phone gives me
                                                              freedom and mobility. I don’t
      and sporting activities                                 feel guilty when I am leaving
                                                              the office because I am not
                                                              really leaving"



4    © 2005 Nokia
Consumer Segmentation | Style leaders


Style leaders                                                            HIGH INVOLVEMENT




Mobile telephony




                                                                                            ASPIRATIONAL
                                                              RATIONAL
    • They like to be up to date with the latest trends and              LOW INVOLVEMENT

      cutting edge design
    • Mobile phone should have the latest features even if
      they don’t use them – it shows they know technology
    • May well us it as a fashion accessory
    • It’s important to personalize the outside look
    • Are embarrassed if their phone looks outdated
    • Want people recognize the mobile phone brand they
      use
    • Camera and music are big amongst them




5    © 2005 Nokia
Consumer Segmentation | Style followers


Style followers                                                                          HIGH INVOLVEMENT




Life, work, values and activities




                                                                                                            ASPIRATIONAL
                                                                              RATIONAL
    • Workers with middle educational level and mid-to-low                               LOW INVOLVEMENT

      economic level.
    • Settled and risk adverse, pragmatic. Work to make a living
      and survive. Wish to have better material life. Don’t take (or
      have) time to appreciate things
    • Ecologically aware.
    • Need benchmarks and rely on leaders and law.
      However, have room for personal expression
    • Meals with family everyday, rarely go out,
      never travel.                                                    ‘Show my style’
    • Limited time for reading or watching TV
                                                               “I don’t text. It takes too
                                                               long. Talking lets you
                                                               express yourself more
                                                               clearly"



6    © 2005 Nokia
Consumer Segmentation | Style followers


Style followers                                                                HIGH INVOLVEMENT




Mobile telephony




                                                                                                  ASPIRATIONAL
                                                                    RATIONAL
    • Aspiring to a stylish device                                             LOW INVOLVEMENT


    • They are design oriented. They would prefer a great looking
      mobile phone rather than having the latest features
    • A mobile phone can be used as a fashion accessory and they
      feel proud when people look at their mobile
    • Looking for ‘status symbol’, Stylish, modern devices with
      unique/different forms, without paying top prices
    • Features important, but secondary to the device image and
      practicality




7    © 2005 Nokia
Consumer Segmentation | Career builders


Career builders                                                                          HIGH INVOLVEMENT




Life, Work, Values and Activities




                                                                                                            ASPIRATIONAL
                                                                              RATIONAL
    • Likely to be in an established relationship, possibly parents.                     LOW INVOLVEMENT


    • Skew to mid-high education and income.
    • Hard work & active social life, desire to go out, have fun and
      socialize - hedonists.
    • Optimists, strong interest in self development.
    • Enjoy taking risks, do things just to prove they can.
    • Entrepreneurship is prominent

                                                                       ‘Make it work for me’
                                                                “I have 400
                                                                contacts entered
                                                                into this phone"




8    © 2005 Nokia
Consumer Segmentation | Career builders


Career builders                                                               HIGH INVOLVEMENT




Mobile telephony




                                                                                                 ASPIRATIONAL
                                                                   RATIONAL
    • Relatively feature knowledgeable but usage of more                      LOW INVOLVEMENT

      advanced functions fairly limited
    • Very balanced purchasing preferences
    • Will consider trying something new if it looks good and is
      modern
    • Camera favorites
    • Want an all in one phone with computer functions
    • Appear to want more than will use – always looking for
      value for money
    • Brand important. Aware of all manufacturers’ reputation




9    © 2005 Nokia
Consumer Segmentation | Comfortable seniors


Comfortable seniors                                                                    HIGH INVOLVEMENT




Life, Work, Values and Activities




                                                                                                          ASPIRATIONAL
                                                                            RATIONAL
 • Mainly married and retired, and usually have grand-                                 LOW INVOLVEMENT

   children
 • Typical grand-parents. Most characterized by settled life.
   Usually satisfied with their way of living. They feel no
   nostalgia for the past
 • Ruled by habit and strict routine. Like to spend time at
   home.
 • Somewhat active, drive a car everyday, travel within
   country from time to time. Browse stores and go to
   restaurant occasionally.                                        ‘Keep in touch’
                                                              “Sometimes I think I could
                                                              get a new phone but I like
                                                              this one. It works, and I like
                                                              it, so I stick with it"



10   © 2005 Nokia
Consumer Segmentation | Comfortable seniors


Comfortable seniors                                                      HIGH INVOLVEMENT




Mobile telephony




                                                                                            ASPIRATIONAL
                                                              RATIONAL
 • Simplicity and ease of use are key drivers of choice                  LOW INVOLVEMENT


 • No great brand affinity though trust and reliability are
   mentioned
 • Phone has to be “good value”, doesn’t necessarily mean
   “cheap”
 • Do not depend on mobile phone to organize life
 • Are not proud when people look at their mobile, not
    embarrassed if their mobile looked outdated
 • Not important to personalize outside look




11   © 2005 Nokia
Consumer Segmentation | Family providers


Family providers                                                                    HIGH INVOLVEMENT




Life, work, values and activities




                                                                                                       ASPIRATIONAL
                                                                         RATIONAL
 • Usually married with children.                                                   LOW INVOLVEMENT


 • Work to „live and survive“
 • Pessimists who don’t like going out, don’t seek fun. Not
   decisive, and fearful of future. Wish to be more affluent.
 • Status quo and economic security are main drivers in life
 • Do not feel part of society as a whole. Not concerned about
   environment or religion
 • Enjoy watching videos/DVDs at home.
                                                                 ‘Want proven products’
                                                            “I do not particularly
                                                            like it (mobile phone)
                                                            but my work depends
                                                            on it"



12   © 2005 Nokia
Consumer Segmentation | Family providers


Family providers                                                         HIGH INVOLVEMENT




Mobile telephony




                                                                                            ASPIRATIONAL
                                                              RATIONAL
 • Basic users looking for a simple phone with good feature              LOW INVOLVEMENT
   set in a nice package
 • Very much ‘middle of the road’ view on design - must
   look simple, modern
 • Camera/video function widely mentioned
 • Less concerned with brand relative to other groups and
   willing to try almost anything
 • Good quality with looks and features better than basic
   offering preferred
 • Price an issue – Will not spend more for extras




13   © 2005 Nokia
Consumer Segmentation

Consumer Segmentation Model Summary Map
                                                High Involvement



                                                                                                 Style
                                                                                                 Leaders
                                                                   Career Builders




                                                                                                    Aspirational
Rational




                                                                                     Style
                                                                                     Followers
                                                                     Family
                          Comfortable Seniors                        Providers




                                                Low Involvement


 14        © 2005 Nokia
Czech consumers are decisive about handset selection
    Did you know what you wanted?
l    41% of respondents knew exactly which handset model they wanted to get before their purchase. A further 18% knew which brand they
     wanted, but not the actual model; and so on, down to just 7% that had no idea what they were going to purchase.
l    Looking at the data across the different segments indicates that some variance in the mindset of consumers, as expected
      –    Knowing the specific model of handset was the most common mindset in all segments but more so for Technology Leaders - the
           majority (51%) in this segment knew the specific model.
      –    At the other end of the scale, the less involved consumers display their lack of knowledge about different brands with 17% of
           Comfortable Seniors, 15% of Practical Homeowners and 13% of Family Providers having no idea at all what they were going to get.


                                                            Pre-purchase mindset

                             Career Builders                   45%                        21%         5%     11%         13% 3%


                               Style Leaders                   43%                        19%        5%    9%          14%     5%


                              Style Followers                42%                    15%     5%       10%           23%         5%


                            Family Providers                  41%                     21%            7% 3%       13%         12%


                        Comfortable Seniors                36%                14%      7%       9%         17%           17%




                           Knew specific model                               Knew which brand but not model
                           Had a few brands in mind, but not models          Had a few models in mind
                           Had a few 'must have' features                    Had no idea
          Technology
          JN: 143751
Network versus manufacturer mindset
    Did you choose the network first, or the handset?

l    38% of Czech consumers choose the network they want to be with before considering handsets, just 19% pick the
     handset first, while 40% shop without either in mind
l    The large proportion of consumers who are shopping without either network or manufacturer in mind presents a clear
     opportunity for Nokia to establish top-of-mind consideration among shoppers
l    Nokia should be aiming to instil in consumers the belief that handset is the primary consideration and this can be done
     by better differentiating devices and the key USP’s of specific handsets against the competition

                                                     Network versus manufacturer

                           Career Builders               36%                  23%                     40%                2%




                             Style Leaders                    45%                   22%                  27%         6%




                           Style Followers                     49%                  15%                32%               4%




                      Comfortable Seniors                   41%               11%                  44%                   3%



                               Practical
                                                        32%             12%                  50%                     6%
                             Homeowners

                      Pick the network first   Pick the handset first   Shop without either in mind         Don't know

         Technology
         JN: 143751
Influences on purchase – single most important
    Which of the following were most influential on your purchase?

l    Recommendations – either from friends or sales consultants - appear to be more influential to the final purchase decision for the less
     involved mobile users




      100%

                            3%
                                                                              4%                        10%
                            9%                                                                                                         3%
                                                                              5%
       80%                                                                                               4%                            6%
                                                7%
                            9%                                               11%
                                                5%                                                      10%
                                                                                                                                      12%
                            8%                  7%                            8%                         6%
                                                                                                                                       4%
       60%
                           12%                                                7%                        10%
                                               13%                                                                                    13%
                                                                              7%
                            7%
                                               10%                                                                                     9%
       40%                                                                                              20%
                           17%                  9%                           26%
                                                                                                                                      16%

                                               14%
       20%
                                                                                                        31%
                           26%
                                                                             20%                                                      22%
                                               15%

        0%
                      Career Builders      Style Leaders                Style Follow ers         Comfortable Seniors         Practical Hom eow ners

                Recommendation - friends                   Magazine/ newspaper reviews                   Handset brands website
                Other websites                             Recommendation - salesperson                  Brochures/ promotionnal literature
                Internet advertising                       Seeing product being used by others




         Technology
         JN: 143751
Purchase location by segment in detail
    Where did you purchase your mobile handset?

l    Operator owned channels are dominant purchase channels in the Czech Republic overall – whether they be in-store,
     over the phone or online.




                 Career Builders                  36%          4%     8%      11%           2%    11%        3% 5%      7% 1%
                                                                                                                            1%        11%




                   Style Leaders                      43%            1%4%    5%        8%              15%        3%   7%    6% 1% 5%
                                                                                                                                 2%




                 Style Followers                   39%           2% 6% 2% 5%                15%         4%    7%        9%   1%4%      7%




          Comfortable Seniors                         41%            3% 3%   7% 1% 7%             6%    4%    6% 3%           19%




        Practical Homeowners                    33%          4% 3%     12%        5%        8%         8%    5%        8%        15%



        store-operator                 store-telecom             store-manufacturer                          electrical hypermarket
        store-electrical small store   department store          IT specialist store                         other store
        phone-operator                 phone-telecom             phone-manufacturer                          online-operator
        online-telecom                 online-manufacturer       catalogue/brochure                          other




        Technology
        JN: 143751
Conclusion



Conclusion

 • The most important segments are Family providers and
   Comfortable seniors – majority of the Czech population
 • People are different – they have different needs …
     … but everybody prefer „easy of use“
 • When buying new product, the most important for decision
   making is the friends recommendation => viral marketing
   works
 • The operator stores are still very important in the purchase
   process




19   © 2005 Nokia

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Chování zákazníka při výběru telefonu

  • 1. Consumer Segmentation - Purchasing process michal.hysky@nokia.com 1 © 2005 Nokia
  • 2. Consumer Segmentation Consumer Segmentation Model Map High Involvement Technology Young Leaders Explorers Style Pragmatic Leaders Leaders Career Builders Young Settlers Aspirational Rational Style Seekers Practical Homeowners Style Followers Family Comfortable Seniors Providers Low Involvement 2 © 2005 Nokia
  • 3. Consumer Segmentation Consumer Segmentation Model Map High Involvement Style Leaders Career Builders Aspirational Rational Style Followers Family Comfortable Seniors Providers Low Involvement 3 © 2005 Nokia
  • 4. Consumer Segmentation | Style leaders Style leaders HIGH INVOLVEMENT Life, Work, Values and Activities ASPIRATIONAL RATIONAL • Over represented in young and young married couples with LOW INVOLVEMENT kids • Tend to be well-educated and well-off • Optimistic and highly motivated. Willing to try new experiences • Hard-working perfectionists. Like to take initiatives • Willing to take risks to get what they want • Environment values in general are important to them • Spend a lot of time outside, like socializing and ‘Set mobile trends’ eating out • Cinema, music, photography, and competitive “My cell phone gives me freedom and mobility. I don’t and sporting activities feel guilty when I am leaving the office because I am not really leaving" 4 © 2005 Nokia
  • 5. Consumer Segmentation | Style leaders Style leaders HIGH INVOLVEMENT Mobile telephony ASPIRATIONAL RATIONAL • They like to be up to date with the latest trends and LOW INVOLVEMENT cutting edge design • Mobile phone should have the latest features even if they don’t use them – it shows they know technology • May well us it as a fashion accessory • It’s important to personalize the outside look • Are embarrassed if their phone looks outdated • Want people recognize the mobile phone brand they use • Camera and music are big amongst them 5 © 2005 Nokia
  • 6. Consumer Segmentation | Style followers Style followers HIGH INVOLVEMENT Life, work, values and activities ASPIRATIONAL RATIONAL • Workers with middle educational level and mid-to-low LOW INVOLVEMENT economic level. • Settled and risk adverse, pragmatic. Work to make a living and survive. Wish to have better material life. Don’t take (or have) time to appreciate things • Ecologically aware. • Need benchmarks and rely on leaders and law. However, have room for personal expression • Meals with family everyday, rarely go out, never travel. ‘Show my style’ • Limited time for reading or watching TV “I don’t text. It takes too long. Talking lets you express yourself more clearly" 6 © 2005 Nokia
  • 7. Consumer Segmentation | Style followers Style followers HIGH INVOLVEMENT Mobile telephony ASPIRATIONAL RATIONAL • Aspiring to a stylish device LOW INVOLVEMENT • They are design oriented. They would prefer a great looking mobile phone rather than having the latest features • A mobile phone can be used as a fashion accessory and they feel proud when people look at their mobile • Looking for ‘status symbol’, Stylish, modern devices with unique/different forms, without paying top prices • Features important, but secondary to the device image and practicality 7 © 2005 Nokia
  • 8. Consumer Segmentation | Career builders Career builders HIGH INVOLVEMENT Life, Work, Values and Activities ASPIRATIONAL RATIONAL • Likely to be in an established relationship, possibly parents. LOW INVOLVEMENT • Skew to mid-high education and income. • Hard work & active social life, desire to go out, have fun and socialize - hedonists. • Optimists, strong interest in self development. • Enjoy taking risks, do things just to prove they can. • Entrepreneurship is prominent ‘Make it work for me’ “I have 400 contacts entered into this phone" 8 © 2005 Nokia
  • 9. Consumer Segmentation | Career builders Career builders HIGH INVOLVEMENT Mobile telephony ASPIRATIONAL RATIONAL • Relatively feature knowledgeable but usage of more LOW INVOLVEMENT advanced functions fairly limited • Very balanced purchasing preferences • Will consider trying something new if it looks good and is modern • Camera favorites • Want an all in one phone with computer functions • Appear to want more than will use – always looking for value for money • Brand important. Aware of all manufacturers’ reputation 9 © 2005 Nokia
  • 10. Consumer Segmentation | Comfortable seniors Comfortable seniors HIGH INVOLVEMENT Life, Work, Values and Activities ASPIRATIONAL RATIONAL • Mainly married and retired, and usually have grand- LOW INVOLVEMENT children • Typical grand-parents. Most characterized by settled life. Usually satisfied with their way of living. They feel no nostalgia for the past • Ruled by habit and strict routine. Like to spend time at home. • Somewhat active, drive a car everyday, travel within country from time to time. Browse stores and go to restaurant occasionally. ‘Keep in touch’ “Sometimes I think I could get a new phone but I like this one. It works, and I like it, so I stick with it" 10 © 2005 Nokia
  • 11. Consumer Segmentation | Comfortable seniors Comfortable seniors HIGH INVOLVEMENT Mobile telephony ASPIRATIONAL RATIONAL • Simplicity and ease of use are key drivers of choice LOW INVOLVEMENT • No great brand affinity though trust and reliability are mentioned • Phone has to be “good value”, doesn’t necessarily mean “cheap” • Do not depend on mobile phone to organize life • Are not proud when people look at their mobile, not embarrassed if their mobile looked outdated • Not important to personalize outside look 11 © 2005 Nokia
  • 12. Consumer Segmentation | Family providers Family providers HIGH INVOLVEMENT Life, work, values and activities ASPIRATIONAL RATIONAL • Usually married with children. LOW INVOLVEMENT • Work to „live and survive“ • Pessimists who don’t like going out, don’t seek fun. Not decisive, and fearful of future. Wish to be more affluent. • Status quo and economic security are main drivers in life • Do not feel part of society as a whole. Not concerned about environment or religion • Enjoy watching videos/DVDs at home. ‘Want proven products’ “I do not particularly like it (mobile phone) but my work depends on it" 12 © 2005 Nokia
  • 13. Consumer Segmentation | Family providers Family providers HIGH INVOLVEMENT Mobile telephony ASPIRATIONAL RATIONAL • Basic users looking for a simple phone with good feature LOW INVOLVEMENT set in a nice package • Very much ‘middle of the road’ view on design - must look simple, modern • Camera/video function widely mentioned • Less concerned with brand relative to other groups and willing to try almost anything • Good quality with looks and features better than basic offering preferred • Price an issue – Will not spend more for extras 13 © 2005 Nokia
  • 14. Consumer Segmentation Consumer Segmentation Model Summary Map High Involvement Style Leaders Career Builders Aspirational Rational Style Followers Family Comfortable Seniors Providers Low Involvement 14 © 2005 Nokia
  • 15. Czech consumers are decisive about handset selection Did you know what you wanted? l 41% of respondents knew exactly which handset model they wanted to get before their purchase. A further 18% knew which brand they wanted, but not the actual model; and so on, down to just 7% that had no idea what they were going to purchase. l Looking at the data across the different segments indicates that some variance in the mindset of consumers, as expected – Knowing the specific model of handset was the most common mindset in all segments but more so for Technology Leaders - the majority (51%) in this segment knew the specific model. – At the other end of the scale, the less involved consumers display their lack of knowledge about different brands with 17% of Comfortable Seniors, 15% of Practical Homeowners and 13% of Family Providers having no idea at all what they were going to get. Pre-purchase mindset Career Builders 45% 21% 5% 11% 13% 3% Style Leaders 43% 19% 5% 9% 14% 5% Style Followers 42% 15% 5% 10% 23% 5% Family Providers 41% 21% 7% 3% 13% 12% Comfortable Seniors 36% 14% 7% 9% 17% 17% Knew specific model Knew which brand but not model Had a few brands in mind, but not models Had a few models in mind Had a few 'must have' features Had no idea Technology JN: 143751
  • 16. Network versus manufacturer mindset Did you choose the network first, or the handset? l 38% of Czech consumers choose the network they want to be with before considering handsets, just 19% pick the handset first, while 40% shop without either in mind l The large proportion of consumers who are shopping without either network or manufacturer in mind presents a clear opportunity for Nokia to establish top-of-mind consideration among shoppers l Nokia should be aiming to instil in consumers the belief that handset is the primary consideration and this can be done by better differentiating devices and the key USP’s of specific handsets against the competition Network versus manufacturer Career Builders 36% 23% 40% 2% Style Leaders 45% 22% 27% 6% Style Followers 49% 15% 32% 4% Comfortable Seniors 41% 11% 44% 3% Practical 32% 12% 50% 6% Homeowners Pick the network first Pick the handset first Shop without either in mind Don't know Technology JN: 143751
  • 17. Influences on purchase – single most important Which of the following were most influential on your purchase? l Recommendations – either from friends or sales consultants - appear to be more influential to the final purchase decision for the less involved mobile users 100% 3% 4% 10% 9% 3% 5% 80% 4% 6% 7% 9% 11% 5% 10% 12% 8% 7% 8% 6% 4% 60% 12% 7% 10% 13% 13% 7% 7% 10% 9% 40% 20% 17% 9% 26% 16% 14% 20% 31% 26% 20% 22% 15% 0% Career Builders Style Leaders Style Follow ers Comfortable Seniors Practical Hom eow ners Recommendation - friends Magazine/ newspaper reviews Handset brands website Other websites Recommendation - salesperson Brochures/ promotionnal literature Internet advertising Seeing product being used by others Technology JN: 143751
  • 18. Purchase location by segment in detail Where did you purchase your mobile handset? l Operator owned channels are dominant purchase channels in the Czech Republic overall – whether they be in-store, over the phone or online. Career Builders 36% 4% 8% 11% 2% 11% 3% 5% 7% 1% 1% 11% Style Leaders 43% 1%4% 5% 8% 15% 3% 7% 6% 1% 5% 2% Style Followers 39% 2% 6% 2% 5% 15% 4% 7% 9% 1%4% 7% Comfortable Seniors 41% 3% 3% 7% 1% 7% 6% 4% 6% 3% 19% Practical Homeowners 33% 4% 3% 12% 5% 8% 8% 5% 8% 15% store-operator store-telecom store-manufacturer electrical hypermarket store-electrical small store department store IT specialist store other store phone-operator phone-telecom phone-manufacturer online-operator online-telecom online-manufacturer catalogue/brochure other Technology JN: 143751
  • 19. Conclusion Conclusion • The most important segments are Family providers and Comfortable seniors – majority of the Czech population • People are different – they have different needs … … but everybody prefer „easy of use“ • When buying new product, the most important for decision making is the friends recommendation => viral marketing works • The operator stores are still very important in the purchase process 19 © 2005 Nokia